FHA (In)Secure

Mortgage and Lending with Guaranteed Rate NMLS# 2611 NMLS #208860

FHA All signs are pointing to FHA as the savior of this market.  Numbers don't lie.  FHA originations were in the 2-3% range just a year or so ago; now I wouldn't be surprised to find it closer to 20% of the market share.  Amazing loan programs, no minimum credit score (sort of), and 3% down.  It's a sweet deal.  We got our FHA approval about a month ago and I can't tell you how excited we are about their programs.  All but one of them.

FHA Secure.  I'm still trying to figure this one out.  You have a borrower whose ARM loan resets, the payment goes up, and they get crushed trying to keep up.  FHA Secure was orginally established last September to help these folks out and put them in a fixed loan with a lower rate.  In July, FHA updated those guidelines and now you can refi any loan, fixed or adjustable, into an FHA Secure loan.  Makes sense so far.

But what happens when you owe more than the house is worth?  What if you have two mortgages?  Now your work is cut out for you.  What if you're late on your payments?  New guidelines allow lates, allow you to write down or short pay a borrower's current loans. and allow unlimited CLTV's.  But is anyone actually doing these loans?  After calling all of my wholesale AE's, I've only found one lender (Taylor Bean) that is writing FHA Secure loans.  What good is a program if no lenders are on board?  I'm trying to figure this one out, so any input would be appreciated.  For now, I'm getting mixed signals and I'm looking for a better sign!

Comments (3)

Jackie - computer-training-atlanta.com
770.498.7333 - Atlanta, GA
Learn to leverage technology to get more done.

Mike - That's the rub with FHA-the lenders have to suppor it.  I sent you an email with a lender who may be doing FHA secure loans when a borrower has some late payments. Hope it helps.

Aug 07, 2008 01:41 PM
Lewis Poretz
Apex Home Loans - Annapolis, MD
Business Development Manager

Mike -  I had a client call me earlier this week. Their arm is about to adjust. This client is a 700+ score borrower with assets and is flat out getting squeezed. The adjustable rate loan they are in is gonna crush their finances.....  They call their existing lender and got this advice --- Don't pay your mortgage for two months once your loan adjusts and we will attempt to finance you using the FHA secure program

A lender told a customer to NOT PAY THE MORTGAGE.... what is going on????

Aug 07, 2008 04:49 PM
Jackie - computer-training-atlanta.com
770.498.7333 - Atlanta, GA
Learn to leverage technology to get more done.

FHA Secure can be used to refinance a borrower who is current on their mortgage. (Mortgagee letter 08-13; Expansion of FHASecure).

Aug 08, 2008 12:09 AM